Digitalisation helps values-based banks to address financial exclusion

According to a recent survey by the Global Alliance for Banking on Values (GABV) among its member banks’ Chief Executive Officers, values-based banks are moving from basic digital services to more sophisticated digital offerings, in part due to the pandemic.

The main drivers are customer convenience, ability to scale up and operational efficiency. The survey was held among the CEOs of the 66 banks, with 52 responses.

Values-based banks use money to deliver positive social and environmental impact.

They are private banks, microfinance institutions, credit unions, and community banks, serving more than 60 million customers in 44 countries and holding over $200bn.

Digitalisation allows them to be closer to their customers and meet their needs, which is strategically one of the key principles of these types of banks. There is a high penetration of basic digital products and services globally among values-based banks.

Internet banking, credit or debit cards and mobile wallets are the primary three services and solutions in deployment among the financial institutions. A 50% have implemented digital customer onboarding, and 33% have implemented digital loan processing.

The products expected to focus in future are related to loans and investments like digital loan applications, digital loan processing and approval, and digital investment apps.

Nevertheless, there are differences in the priorities between regions.

For African members, the priority in the coming months is electronic banking, while in the Asia-Pacific region, the focus is to implement digital onboarding of their clients.

European and Latin American banks need digital loan applications and processing, while North American banks are focusing on data mining and digital loan processing.

IT solutions for financial inclusion

Technology plays a role to make a financial product different and special to the clients.

The Global Alliance for Banking on Values welcomed two new members in 2021 that are clear examples of financial institutions using digitalisation to create inclusive banking.

FINCA DRC, in the Democratic Republic of Congo, and Credo Bank, in Georgia.

FINCA DRC started in 2003, when the war in the country was not officially over. Its dedication to low-income people has transformed the lives of thousands of Congolese.

FINCA DRC has 21 branches in nine out of 26 provinces, headquartered in Kinshasa.

The foundation has over 1,600 FINCA Express Full Option Points scattered in rural and semi-urban areas to serve the most remote populations. Currently FINCA DRC reaches total assets of $60,000,000 ($60 million) and serves over 350,000 clients.

Credo Bank provides sustainable financial services to small and medium entrepreneurs in Georgia, focusing on providing agricultural and employment opportunities.

The bank operates in 11 regions and serves more than 350,000 customers. It is a market leader in innovative product delivery, with over half of the country’s market share.

The bank has partnered with different platform and payment services to allow its customers to pay loans digitally, benefiting borrowers in rural areas of Georgia.

Other examples worldwide

Values-based banks are using technology to build and serve more inclusive communities.

Lead Bank, a community bank in Kansas, United States of America has partnered with the fintech Finzly and the payments platform PointChain to offer sophisticated payment services for technology-focused businesses and fintech companies via APIs.

The result is payments processing services for a wider client base and the foundations for instant payments services in the future.

Nepalese NMB Bank was awarded as 2021’s Best Bank of Asia and has prioritised sustainable banking, digital transformation, and corporate governance since 2015.

It was the first to launch an Omnichannel system under which customer service can be processed through video and operations can be performed using a messenger service.

With Omnichannel, any customer can apply for a loan online, and it will be issued if the corresponding documents are correct and without necessarily printing any paper.

Integral in El Salvador has developed Flexipago, a new financial product for micro and small businesses that adapts the payment of fees in loans to the business seasonality.

The new loan product has an inclusive profile and is intended for those who are seeking financing for working capital, fixed assets and business debt consolidation.

Teachers Mutual Bank launched Hiver in 2021, a new digital bank for essential workers.

Hiver is the first Australian mutual and ethical digital bank that matches global benchmarks for social responsibility and meets Australians’ banking expectations.

Clients will set up direct debits or make direct payments from online or mobile banking. Further products like home loans via the broker channel will be made available.

Values-based banks resilience

The GABV survey explored the confidence and growth expectations that values-based banks had at the end of 2021 in comparison with the same period of 2020.

Although recovery from Covid-19 is at different stages across values-based banks, they were more confident than regarding profitability, asset quality and general business.

In profitability, 61.5% were optimistic compared to 13.6% in 2020. Less than 2% were pessimistic compared to 29.5% in 2020, and 36.5% remained neutral (2020: 56.8%).

The Global Alliance for Banking on Values (GABV) is a network of independent banks using finance to deliver sustainable economic, social and environmental development.

The Global Alliance for Banking on Values has 66 members and operates in 44 countries across Asia, Africa, Asia-Pacific, Latin America, North America and Europe.

Collectively the financial institutions offer service to more than 60 million customers and hold over $210 billion of combined assets under management. Learn more at